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Formulating sound policy vis-à-vis technical debt requires a thorough understanding of the distinction between the MPrin associated with a technical debt and the principal amount of a financial debt. There are three fundamental differences between them.

MPrin can change spontaneously

For most financial debts, the principal amount is determined by formula, or by voluntary actions of the debtor, such as making periodic payments on an installment loan, or new purchases on a credit card account. By contrast, MPrin can change absent any action by the “borrower.” For example, changes in regulations, standards, or technologies can all cause changes in MPrin. More: “How MPrin can change spontaneously”

Technical debt can create more technical debt

Technical debt left in place can create more technical debt without the knowledge or consent of the debtor organization. By contrast, the principal amount of a financial debt can grow, but law or regulation requires notification—and in some cases consent—of the debtor. More: “How MPrin can change spontaneously”

Projecting MPrin with useful precision might not be possible

The cost of retiring a technical debt can depend on how the asset bearing the debt has changed over the life of the debt. And it can depend on how the enterprise is engaged at debt retirement time. These factors are difficult to predict. By contrast, projecting the principal amount of a financial debt is formulaic. More: “Useful projections of MPrin might not be attainable”

A pole full of wires. Technical debt is everywhere.

The policy implications of these properties of MPrin can be profound. The possibility of spontaneous change in MPrin implies a need for investments in market and technological intelligence focused specifically on potential effects on technical debt. The possibility that existing technical debt can cause the creation of new instances of that debt or other debts implies a need for awareness of what kinds of technical debt are most likely to exhibit this phenomenon. Finally, the difficulty of projecting MPrin implies that typical reliance on analytical modeling of enterprise asset evolution in preference to human judgment may be misplaced. A wiser course might be investment in employee retention programs focused on the individuals who can provide the necessary wisdom.

This is just a sketch of the problems policymakers confront when dealing with the properties of MPrin. I’ll be addressing them in more detail in future posts.

Related posts

In some instances, technical debt is actually a missing or incompletely implemented capability. If we retire the debt by completing the implementation, the MPrin is the cost of that effort, plus any training, testing, and lost revenue. If we retire the debt by halting or withdrawing the capability, the MPrin is the total cost of removal, plus testing and lost revenue.

The Metaphorical Principal of a technical debt that’s incurred as a result of a change in standards or regulations, internal or external, is the cost of bringing all affected assets into full compliance. Properly accounted for, however, the MPrin should include ripple effects, which are the changes in other assets that are required to keep them compatible with the assets that are directly affected.

Platform component upgrades often trigger the need to make changes in whatever sits atop the platform, to maintain compatibility with the platform. Those changes obviously contribute to MPrin. But less obvious are the contributions that arise from deferring the upgrade.

The MPrin of an asset that is subjected to new development or enhancement has some special characteristics. For an existing asset, new development can lead to duplication of capability. For new assets, unanticipated opportunities can transform into technical debt components that were not viewed as technical debt, without ever changing them in any way.

Some examples might help to clarify the differences between the principal of financial debts and the Metaphorical Principal of a technical debt. The examples to come in the next four posts are designed to illustrate the unique properties of MPrins of technical debts.

The principal amount of a financial debt and the metaphorical principal of a technical debt have very different properties. They are so different that it’s wise to avoid using the term “principal” to refer to the metaphorical principal of a technical debt. We use the term MPrin.

[Bossavit 2013] Laurent Bossavit (@Morendil), “Zero Code Ownership will lead to a tragedy-of-the-commons situation, where everybody bemoans how ‘technical debt’ makes their job suck.”, a tweet published April 20, 2013.

[Harcourt 1998] Bernard E. Harcourt. “Reflecting on the Subject: A Critique of the Social Influence Conception of Deterrence, the Broken Windows Theory, and Order-Maintenance Policing New York Style,” 97 Michigan Law Review 291 (1998).

[Kruger 1999] J. Kruger and D. Dunning. “Unskilled and Unaware of It: How Difficulties in Recognizing One's Own Incompetence Lead to Inflated Self-Assessments,” Journal of Personality and Social Psychology, 77(6), 1121-1134 (1999).

[Ross 2000] Jeanne W. Ross and David F. Feeny. “The Evolving Role of the CIO,” in Framing the Domains of IS Management Research: Glimpsing the Future through the Past, edited by Robert W. Zmud. Pinnaflex, 2000.

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Reference posts

A collection of definitions of terms as we use them in this blog, with links to longer discussions of each term. Along with each definition is a link to a post that discusses that term in more detail. Read more…

Welcome to Technical Debt for Policymakers. What you’ll find here are resources, insights, and conversations of interest to policymakers who are concerned with managing technical debt within their organizations. Read more…

When retiring one kind of technical debt from an asset, auxiliary technical debt is any other kind of technical debt in the asset. It can be tempting to try to retire auxiliary technical debt too. Sometimes that’s wise, but it can lead to scope creep. Rules of engagement can control this temptation. [More]

To retire technical debt, we need to know where it is. And if service disruptions are necessary, we need to know who will be affected. Here’s a survey of some of the issues, and suggestions for resolving them. [More]

For some assets, we can’t allow debt to persist, and we can’t afford replacements. We must retire the debt. This post begins exploring what it takes to design projects to retire technical debt in irreplaceable assets. [More]

By carefully observing what happens when we actually try to retire some kinds of technical debt, we can better understand the degree of the degree of wickedness of the effort. That understanding helps manage risk in technical debt retirement projects, reducing costs and speeding execution. [More]